According to reports, the Indian renewable energy industry has for long sought cheaper finance from the National Clean Energy Fund (NCEF), and now it looks like its wish will be granted.
The Renewable Energy Act, which in the works, is likely to mandate that 50 per cent of the balance in NCEF will go to funding renewable energy projects, according to G M Pillai, who was a member of a six-member sub-committee that drafted the law. The draft is currently under the consideration of the Ministry of New and Renewable Energy, Pillai, who is also the Director-General of the World Institute of Sustainable Energy, said at a conference on Green Energy here on Friday.
The NCEF has a corpus of over ₹17,000 crore, from the coal cess — a ₹200 levy on every tonne of coal mined in India or imported.
The Technical Committee on Renewable Energy Law, set up by the MNRE, has recommended that the NCEF should be used to subsidise loans to renewable energy projects so that the industry gets funds for interest rates of “at least 9 per cent,” Pillai said.
Speaking at the conference organised by the Confederation of Indian Industry, Pillai also appealed to the various State electricity regulatory commissions to take note of the fact that the ‘operations and maintenance’ costs of wind farms were too high. Typically, manufacturers of wind turbines also undertake O&M for a fee. Pillai said that the O&M charges were fixed without any transparency. He wanted O&M fees to be based on power generation or the revenues of the wind farm. Today, the fees are fixed on the basis of capital expenditure.